SAS: Now you are at the position of Chief Sales Officer of Makedonski Telekomunikacii, which are the major challenges and major opportunities at the Macedonian market today?
To be one of the smallest members of the DT family gives us the opportunity to use Macedonia as a pilot market for certain applications and products. Macedonia is big enough to see all of the effects of a new innovation, but significantly smaller than the German market and easier to apply any corrections immediately. This market position can be used for all of the suppliers.
G. Altmann: There are quite a lot of challenges on the Macedonian market. One of the major ones is that we are slowly approaching saturation and from a growing market, Macedonia is turning into a mature market. It means that the marketing/sales approach should be significantly changed. Instead of acquisition, the focus is now on the retention. The importance of the support systems like the CRM system is increasing. To be able to retain customers, we need targeted and customized offers.
In a growing market we could keep/increase the customer base even if the market share slightly dropped. In a mature market, with the market share decrease, the customer base will decrease as well. It means that the revenue should be maintained with less customers and as a consequence new revenue sources should be developed.
The other challenge is that all of the three mobile operators have almost the same infrastructure and almost the same basic services like mobile voice for prepaid and postpaid customers. To be able to differentiate ourselves we should focus on the customer experience in all of the customer touch points like shops, call center, account management and all the others.
The differentiation has even higher importance than most of the market in Europe. Macedonia is a relatively small market for 3 mobile operators, the market is far from the stable and I believe that the only way to have a stable market – which means three profitable operators – is to manage the overall market growth, which in turn means that operators should find new revenue sources.
SAS: For a last couple of years fixed-mobile convergence (FMC) has been discussed, will we see operators offering FMC at our markets soon? Sounds good to use mobile phone outside the house and when in house to use it as a fixed line phone with the same number.
G. Altmann: Almost all of the operators are speaking about FMC, but there are very few success stories. We are just collecting customer feedbacks what bundle products would be expected. The fix and mobile products have very different customer expectations. Mobile services are more personal and fix services are more for the family. The customers do not want to mix their numbers. They prefer it when only their personal numbers call them on their mobiles . In my view voice as an application is personal, and it’s the reason for the fix to mobile substitution. TV on the other hand, is exactly the opposite, it’s a family application. Internet is in the middle.
I think that one of the main advantages of the FMC is to provide more flexibility for service usage and to optimize the total cost for communication needs.
SAS: In our region we see some big international players present in couple of countries, like Mobilkom, Telenor, Deutsche Telekom, Slovenian Telekom, Serbian Telekom. Which benefits can customers get from this situation? How you see the situation on telecommunications market in the region?
G. Altmann: The traditional telecommunication is a business for big players. I do not believe that the small local network operators can survive in the long run. It is not just because of the economies of scale, but also because international operation has quite a lot of additional benefits. Let me mention just one example from T-Mobile Macedonia. DT as a group concluded the agreement with Apple. Based on this agreement, we gained the right to provide iPhone to our customers in Macedonia. That would never have happened with a small local player.
In the telco business the importance of the global partnership agreements will be accelerated, and in this field the competitive advantages of the big players will further increase.
According to my forecast, in 5 years significant consolidation will happen in the whole of Europe, including the SEE region and by the end of this period, 2 to 3 major operators will remain.
SAS: Prices in communications are going down, operators offer every day more attractive packages but seems that roaming prices are still high. What is your opinion on that?
G. Altmann: In the mobile business not the price itself, but the price perception is the most important. Customers are much more sensitive about national prices; national prices are one of the main drivers for choosing a specific traffic package. In cases when national prices are dropping, the roaming prices are the area where the profit margin can remain. But it’s definitely just one part of the explanations. The other - the major part – is that roaming prices are based on bilateral agreements and to change the complete contractual structure is quite a time consuming exercise.
Even in the short run, I’m quite optimistic. Nowadays the roaming tariffs are one of the focus areas for the regulators. In my view both voice and data roaming prices will be regulated very soon and in the mid-term there will be no significant difference between the national and roaming prices.
SAS: Today we see regional DT presence in Bosnia and Herzegovina, Croatia, Macedonia and Montenegro. What is next? Will we see some new acquisitions?
G. Altmann: With the share in the OTE group, DT presence in the region has significantly increased. In addition to the countries listed in the question, DT has operations in Bulgaria, Romania, Albania, and Greece as well. That would be a logical step to further increase DT’s influence in the SEE region, but I cannot say any details.
SAS: We see operators in many countries using more and more analytics to retain and acquire customers, to win the game on the market. Is it possible to be successful on the tough markets today without analytics?
G. Altmann: I have a technical and marketing background, and the analytical part of the job was always very close to me. Without any subjective feeling, I would say that the analytical part is of great importance in the business and as the market is saturating, this importance will further grow. Product portfolios of network operators are becoming more and more complex, and we can see the introduction of the different bundle products. For this complex product portfolio management we need a sophisticated analytical background.
I do hope that this is good news for SAS, as your solutions add significant value to operators.
SAS: In May we saw that market capitalization of Apple was for a first time higher then market capitalization of Microsoft, does this mean that smart phone won over PC? Seems that we are witnessing move from desktop to the hand! How you see the future of communications?
G. Altmann: Apple is a great example of how a company can grow independent of the market situation. 3 years ago the handset market was quite a stable market, with not a lot of room for any newcomers, especially on the high-end front. The smart phone market was far behind the expectations. Big players like Microsoft, HP, HTC, and Palm could not manage the breakthrough on the smart phone area. And then in 2007, Apple introduced the iPhone. They initially planned to penetrate the residential market, but the customer experience was simply so much beyond the competition, that iPhone became the most popular smart-phone in the business segment as well. Apple started to compete not just with Microsoft but with Nokia, Blackberry, and Google and to some extent with the mobile operators as well. Besides the device itself, Apple introduced a revolutionary new business model. They have added value all over the value-chain like customer base, device, content, distribution. Back to the question, I do not think that smart phones won over PCs. I would say that the business model of Apple won over the business model of Microsoft. I strongly believe that the open systems and the “Application store” models will rapidly spread.
Considering this business model, there is a very interesting challenge: The traditional telco operators invest a fortune in their telecommunication networks and the profit is realized by application providers. Who will invest in the future or how can network operators realize their part of the profit, too? It’s really high time to provide the answer to this question, since not in the very far future, voice will be just one application of the many. And most probably the payment willingness for the voice application will be the same as in the case of all the other applications.
SAS: „Crisis is an opportunity!“ , many times we have heard that. Is it really an opportunity?
G. Altmann: In more developed countries, besides all the negative effects of a crisis, there are certain upsides as well. With the usage of the ICT services, companies can rationalize costs and as one of the basic arguments instead of the traveling they can use teleconference. Another way of cost optimization that more and more enterprises will use is cloud computing. In Macedonia, at the moment, honestly, I can just see a drawback of the crisis. Customers are taking much more care of their usage; employers are minimizing telephone bills, so the ARPU is decreasing.
As a summary, I would like to say that I really enjoy living in Skopje and being involved in the transformation project of Makedonski Telekom. The merge of the fix and mobile business line is ongoing. During the merge, the most challenge is to keep the best practice from both companies and get rid of the old “routines”.